Is taxing the 'Rich' enough?

On paper in might yield that $46 bil….but in reality you will see that same taxable income now get sheltered, written off or shipped over seas. BO will be lucky to net $4.6 bil with this move and gain a ton more corporate enemies in the process.

Don’t be childish and portray one aspect of the speech as the entire content of the speech. The President also specified spending cuts.

IIRC, if we also forced corporations to actually pay their taxes instead of finding ways to have $0 in annual taxes, we’d have this problem fixed right quick.

$46billion seems like a nice big dent. Although, @cruiser is probably partially right that we won’t quite see that much money, but I don’t think it is as low as @cruiser states. We don’t need to pay it off in one year, but a nice 5 year plan would make me happy. If the economy picks up, and people are earning more, it will bring in more taxes.

I also think we need to look at balancing trade. From what I understand other countries require us to follow many regulations when we export or build companies in their countries, but we don’t do the same.

Also, companies have HQ’s in countries that are tax havens, and avoid paying taxes in the US, so the revenue stays out of our country, and we employ people outside of our country. It seems to me US companies should have to pay tax to the US on earnings, just like an indivual has to who is an expat. Expats get their first $75k exempted (that may have changed, but that is what it was) maybe it should be similar for corporations?

Seems to me the laws protect big business and big money. Makes sense since those entities control, influence, and are the powerful in our country.

@jaytkay I have not heard his speech yet, this article was written before the speech.

All I heard from democratic leadership the last couple of weeks was that cutting social spending was not the way to balance the budget.

I think that is just as wrong as the republican attitude of no tax raises.

We need across the board cuts in all government spending as well as judicious tax increases.

@JLeslie That is the annual deficit. $46 billion is less than 4%, I don’t call that a big dent.

@WestRiverrat Well it certainly will not be enough to satisfy the whole debt. Comes out to something like 26 years to pay off if that is the only thing we do, right? If my math is right, which right now I would not rely on my math, feeling pretty tired. But, if we have a few billion with tax increases, and another few billion from other cuts, we are getting closer at least. Right now everyone seems to be balking that everything proposed is just a little dent, but all the dents add up. Plus, debt has interest, and the sooner we pay it off the less it will be in the long run.

That’s one thing I am unclear about, when they quote the deficit or national debt, are they looking at the total payoff? If Inhave a mortgage of $100,000, with interest I actually pay almost $300k, which number is being used when talking about the government? Are they looking at the yearly pay outs? The yearly costs to run the government? So, the same as quoting how much an individual pays a year to maintan their household?

@JLeslie The numbers I used for the basis of my calculations, were the Yearly deficit. The amount the government is borrowing each year. and the CBOs estimates of revenue from increases in tax rates.

If the country stopped buying new houses on credit every year, your analogy could work. But as long as they keep financing a new house every year, they will never get anything but deeper in debt.

@WestRiverrat I was not questioning your 4% calculation, if I came across that way? I agree with your math. And, yes, they have to stop buying “new houses.” If I got the 5 year plan I want, then we need to get 20% somehow, instead of 4%. Is taxing the rich people earning over $250k? Are they/you using that number?

The rich in my calculations was the top two tax brackets. I believe that covers people earning over $175K, but I would have to check the tables to be sure.

@WestRiverrat check out the headline and first paragraph in this link Top 400 earners combined make $105 billion a few years ago, averaged 17% tax, so paid $18 billion in tax. Are your numbers for what is actually paid in? Or, just the supposed bracket?

Again, my numbers are taken from the CBO estimates. How they arrived at these numbers you will have to ask them.

I wonder what they use? I went to the website, but I am too sleepy right now…I need to come back tomorrow. I’ll be interested to see the answers of others. GQ.

@WestRiverrat I have to agree with @jaytkay. There were far more than one initiative in the President’s speech. Letting the Bush tax cuts for the rich expire is just one item among many. He spoke of tax simplification. That could have a far greater impact on revenue, and many rich people might actually welcome that. If you make a lot of money and have to itemize, it is complicated and expensive just to get your taxes prepared. The actual rate that the top 1% pay is about 20%. That works out to less than most ordinary workers end up paying in withholding tax. There were also proposals for reductions in the cost of medical care, allowing Medicare to negotiate for prescription drugs, speeding generics to market and even cuts in the sacred cow, defense. The US spends more on defense than all the other nations of the world combined. There has got to be room to cut there without harming defense readiness.

@Cruiser We are facing a looming debt crisis that was largely created by Ronald Reagan and George W. Bush. Before Reagan slashed taxes for the rich to 28%, they were at 70% on income above $200,000 per year, and the rich didn’t move to other countries. They actually did quite well. They got richer. If they are now so unpatriotic that they would move if their tax rate went up 4.6%, let them go. Good riddance. They are traitors to this land that has done so much for them. We’ll make some new and patriotic rich to replace their sorry, greed-ridden butts. But I don’t think you will see many rich people leaving.

I don’t have the numbers in front of me but while the rate for people before Reagan cut taxes was something like 70%, it is also well known that no one actually paid that much.

On top of that $200K back in the early 80’s was a lot more than it is today. My family earns a tad over $200K and we are not rich by any stretch of the imagination.

Look at how much we spent 10 years ago compared to today. That is where the problem is. Not in taxes.

No one is talking about raising the tax levels to 100%. That is crazy talk.
If they get rid of the Bush era tax cuts, it would put a dent in a major problem.
And I am okay with it not taking care of the whole problem. We can do other things to help the rest.

@missingbite I should have mentioned that any tax plan today should factor in the inflation we’ve seen since 1980. I don’t think $250K should be the starting point for the top bracket today. Maybe $500K, and that being indexed to inflation. And bear in mind that the way the progressive tax system works, if you are in the top bracket, you don’t pay the top rate on income below that magic number. You pay the same rate as lower brackets pay. You are only taxed at the top rate on any adjusted gross income above the magic number. Even living in a ritzy community, you can do pretty well on most of $500,000 plus 60.4% of everything you earn over that amount.

The top 1% of Americans now own over 40% opf all the nation’s wealth. They really don’t need pensioners to starve and the poor and elderly to go without medical care just so they can have even more of the wealth. There are only a handful of billionaires and the national Chamber of Commerce actually fuinding efforts to keep transferring more and more of the shrinking middle class’ wealth to the uber-wealthy. The Koch brothers, the Walton (Wal-Mart) family, the people behinf Amway, the family of Erik Prince of Blackwater fame. Most billionaires are happy to help build a better America.

@ETpro If you are correct about billionaires being happy to pay more, why don’t they just donate the money to the Federal Government?

I know how the progressive tax system works and I also know that the President has stated over and over that people making $200K should pay more. I disagree.

Like I said before, look at spending first. If we still can’t get it under control, we can look at taxes. Like Obama’s buddy from GE whose company paid NO federal taxes on 14 Billion.

Of course not. Spending cuts are critical.

P.S. There is an argument that lowering tax rates (in some brackets anyway) would increase revenues since there will be more spending (which will get taxed).

@roundsquare – Only if they spend it. Think they will this time?

I would go a step further than @ETpro since the income distribution in this country gets a a bit wonky once you get into the top tiers. I would keep what we currently have for a top rate in place for those whose income is in the mid-six-figure range, but would expand the curve to ramp it up more as you get into the 7— and 8-figure range. I mean, a moderately successful small business owner earning $379,150 (the 2011 cutoff for the top bracket) should have a lower tax than somebody earning $37,915,000. And considering that income is growing at the top while staying level in the lower brackets, we pretty much have to tax them.
As for spending cuts, I don’t consider that an option simply because neither side will cut across the board. The GOP wants to screw the poor and subsidize the rich, while the Dems… well, I think anybody who has formed an opinion on this aleady knows about them.

@missingbite The reason that number was chosen is that 90% of Americans earn less than that and thus would not get hit anyways. Then again, 2 out of 5 millionaires don’t feel rich despite having a higher net worth than literally 99.99% of the people on Earth.
BTW, if you think that Obama’s buddy is the first person to get away with tat then you haven’t been paying attention for the last couple of decades.

@missingbite There is quite a consortium of billionaires that are giving directly to causes they feel most passionately about. Many participate through the Bill & Melinda Gates Foundation. Warren Buffet is chief among them. I agree we need to look at spending as well, but the tax cuts sine Reagan have driven income and wealth disparity to levels thay only reached once before in the USA, and that was in 1929. If you set tax policy to slowly bankrupt the 90% to enrich the top 1%, and most of that going to the top 1/10th of 1%, you kill the goose that laid the golden egg.

@roundsquare Killing the goose that laid the golden egg is the problem now. We do not have a supply side problem. US corporations are sitting on $2 trillion because they can’t even sell the inventory they have. Giving them more money will not create jobs, especially if you take that money from the demand side. We have a demand side problem. Consumers, the 90% bunch, needs to catach a break now so they can start spending again.

As to GE paying no taxes, don’t blame the CEO. That’s utterly inane. A CEO’s job is to maximize profits. He did. Blame the tens of thousands of special interest tax giveaways, subsidies and loopholes congress has written into the US corporate tax code.Attack the disease, notthe [atient who is suffering from it.

@laureth

Read your article, everyone saved more money.

“The wealthy and the remaining 95 percent of Americans both saved more of their incomes after the Bush tax cuts.”

If you get a raise in your check at least initially some of it goes into savings. Duh. What is more important is look what happened to government revenues after the tax cuts.

What is killing us is the uncertainty. I thought we had these tax increases behind us, at least for a while. Now Obama wants to trigger more uncertainty again. No one wants to invest until they know what tomorrow will bring. Obama seems to want to keep everyone off balance and insure they continue saving for a rainy day (which appears to be right now). The savings rate has been up since this whole thing started.

@Jaxk The Bush tax cuts did nothing to change Payroll Taxes, and that is what most low and middle income tax payers are taxed on. The plan saves a mythical taxpayer making $50,000 an average of $800 a year. It saves a family making $1,000,000 a year $50,000.

There can be no arguing with the results. Real income for the bottom 90% declined from 2000 to 2010. That is the first time our middle class has lost ground for a decade since the Great Depression. The top 1% saw their incomes and wealth soar. Record surpluses under Clinton went to record deficits under Bush. Thje economy hit a crisis nearly as severe as the Great Depression. This is not my idea of a great plan for the future..

I find it interesting that everyone seems convinced that the tax rates since Reagan have kept the middle class down to advantage the rich. Yet the guy promoting this myth (Obama) made all his money during the same period. I guess he can do it but nobody else can. Oh except maybe Steve Jobs, Micheal Dell, Bill Gates, hell, it’s a long list. All made their money in the same era. Maybe we are still making new millionaires, it just doesn’t fit the picture Obama would like us to see.

@ETpro

Not my idea of a great future either. That’s why we need to change our spending habit. Bush brought in record revenues with his tax cuts but spent even more. Now Obama has taken that spending mistake to new levels. Bush expanded government workers by half a million people. Obama increased government workers by another half a million people.

Bush did some things right and others wrong. Why do we want to continue the plans that didn’t work and kill those that did. And BTW the record for deficits sits with Obama, by no small margin.

@Jaxk People getting rich isn’t the problem. The problems are that:
1) This rising tide isn’t lifting all boats
2) Unemployment is up
3) Real wages for most people haven’t risen
4) Real costs have risen

So basically, there are more poor, the middle class is a bit squishy, and nearly all of the gains we’ve made over the last few years have gone to the rich. I think it safe to say that people are a bit pissed about that.

Also, I don’t recall Jobs, Dell, Gates, or any other financial elite person whose name comes to mind immediately riding a golden parachute and getting rich while their workers got walking papers. Last I checked, Apple, Dell, and Microsoft were still doing well actually. I don’t think it’s so much a resentment of the rich so much as resentment of those who either profit at the unfair expense of others or hating captains that don’t go down with their ship.

@jerv

Despite the rumors from Biden, there is no rising tide. Stimulus didn’t work. That’s why unemployment is still stuck. Costs are rising and wages aren’t keeping up despite low inflation. we don’t seem to want to fix the causes but rather try and fix the blame. The dollar has been declining rapidly that makes everything more expensive. Energy has and is again shooting up draining everyone of not only disposable income but all income. The things that are actually coming down in price are the high end things (houses, TVs etc.) but no one has the confidence in our (or their) financial future, to make big purchases.

So how about we address the problem rather than just finding someone to blame for our sad state of affairs. Get energy under control (that means OIL). Stop borrowing so that the dollar can recover (that means stop spending). It’s not the rich guy down the street that is causing your problem, it’s your government. We need policies that will grow the economy and if someone makes a profit when that happens, so what. Good for them.

@Jaxk I disagree fully that the stimulus (which won’t be entirely spent for another 6–8 years) didn’t work. Also, the economy has grown for all but one month of Obama’s presidency…. and has added jobs (albeit not as many as we’d all like) for 13 months straight…And thats only counting private sector.. Unemployment as of last month was 8.8%.

Just taxing the rich will not solve our problems no. But to only make cuts in programs that are meant to help the poor and middle class, whilst giving the rich a permanent tax cut… is to fix our nation on the backs of the poor and middle class, while giving the rich more money to do nothing with.

The solution is to do both.

@missingbite Besides the fact that many very wealthy are donating money, they also are proposing and voting to raise taxes. The tricky part is, most people won’t pay more taxes, unless everyone like them is. I am willing to pay more taxes, and I am not making over $250k, let alone $500k, but, I am not sending extra money right now to the IRS. I also have a Mexican husband, and if I had a child I would list him/her Hispanic, and get them every advantage I could with quotas, but I would vote against quotas and affirmative action. While it is law, I’ll use it, but at this point in history I am ready to get rid of it (I think I am ready, at least for most of the country I am).

@ETpro I heard the $250k adjusted for inflation is just short of $400k, but $500k is fine with me too, but honestly I think everyone over $150k-500k could pay 1% – 2% more also, the majority of them would not even know they were paying more.

@Jaxk People were very very rich during Clinton too, when taxes were higher. It is not that people cannot get rich, innovative ideas will still get people rich, but how rich does someone have to be? Did you see that link I provided? You don’t have to look at it, but it said the top 400 income earners in America earn around $250 million per year. The unions, equal rights, and other market forces, helped bring higher incomes to the factory workers, office assistants, and more, which created a larger middle class, and our middle class, along with other economic reasons created the prosperpous country American is. That is being eroded. I would rather pay a wage earner well, than tax the very wealthy to death. Reward people for hard work. That means the owners of business need to give up a little of their salary or profit to pay a decent amount of money to their employees.

@Jaxk If there is no rising tide then how are so many companies and investors posting record profits? The top tiers have seen their incomes go up dramatically; most figures I’ve seen place their increase at ten times what the middle class has seen and practically infinitely more than the lower tiers.

@jerv I’m well aware that Obama’s buddy is not the first or the last. What Obama is saying is not just Millionaires need to pay more but people making over 200K and up. There are a lot of people making 250K that are not rich.

@ETpro You bring up a good point about the Bill and Melinda Gates Foundation. You do realize that Obama wants to cut the Tax Exemption for people who give to Charitable Organizations, right? Buffet doesn’t donate millions and millions to the Federal Government does he? He doesn’t because he knows Bill and Melinda can do more good with the money than the Fed can.

@missingbite The federal government gives to the Gates foundation about the same that is donated by other people each year, if I remember correctly. Something like a billion dollars? Not sure. I saw Bill Gates on John Stewart talking about it. I will look for the clip when I am on a computer That supports flash player. Government and private organizations work together all of the time.

@missingbite And those of us earning less than $25k are? Since people like me make up more of the population than those who make >$250k, I think it safe to say that there aren’t many rich people. I mean, that benchmark makes 90% of us poor.

@jerv What does one have to do with the other? Do you want their money from their pockets? That seems to be what you are getting at. You have opportunities to increase that $25K if you wish.

A lot of people make more than I do. Good for them. Some of them employ me. Without them, I may not have a job at all.

@JLeslie That is great that they work together. My point is, when we are in a debt crisis, we have to cut somewhere. I say cut everywhere. We can’t tax enough to cover the spending. We have to have drastic cuts from everywhere. Yes including military.

@missingbite I am for cutting where it is logical. Social security and medicare are programs people count on. We can’t ask someone 80 years old who has not worked in 10 years to figure out how to earn some more money and pay for health care. The rest is up for debate.

@JLeslie Obviously you haven’t gotten correct info about Congressman Ryan’s plan. According to his budget, no one in their 60’s 70’s or 80’s would see a difference at all. If you are 56 you would have to work an additional TWO MONTHS before you could collect SS. It tapers out farther for younger people like me at 40. I may have to work until I am 70.

Your statement about an 80 year old having to look for extra money is an outright lie people like Obama have been spewing for some time now.

@missingbite I was not saying any politicians, or you, are saying to cut SS on 80 year old people, just some of the idiots around me.

Oh, and I am fine with people paying a few more months a year into SS if they make high salaries, and I am fine with pushing back the retirement age a little on younger people.

@JLeslie I see. Sorry. Obama just yesterday or the day before was saying the Republican Budget plan was going to take money from the elderly and sick people. I though that was what you were referring to. Take a look at the Ryan plan. It has drastic cuts without raising taxes on anyone. The only part I disagree with is that it doesn’t cut military at all. Some of our military spending could be toned down a little.

@missingbite No problem. To be honest I have not seen any politics on TV lately, my aunt has been sick, and I have been out of town so much helping her I am completely out of the loop. It’s hard to know online when you are talking to someone who obviously leans one way how far they actually lean, how lined up they are with what is in the media at the moment. I am guilty of it at times also :).

@JLeslie Very true! So difficult to read intent! I hope your Aunt starts feeling better!

Thanks.

I don’t like the scare tactics on either side.

@missingbite There is a reason I learned the trade that I am in as opposed to one that normally only pays what I get. I don’t want handouts, merely fair wages. For what I do, the median is around $40k; a number I would be happy with but can no longer get because of the way things are. Your assertion that there is opportunity is a bit of an overstatement.
Also, I know plenty of older people that need extra money to get by, Hell, many of the people I know are worse off than me!

@jerv I learned a trade as well. In fact, I am doing that trade now at about ⅓ of my former pay. I have gone on to supplement my lost wages with other work to keep me where I was. It takes long hours and dedication. But I am doing it. Some of the work may not be what I want but it brings in money.

I refuse to believe that there is not opportunity in this country. In fact, I know first hand there is. It may not be in the trade you wish for, but it is there. Like it or not.

@missingbite I didn’t say outright that there isn’t, but there isn’t a much a some people think either. After over a year of not being able to get even a menial shit-job, I know that first hand as well.
If hard work and dedication were all it took, my opinion (and my situation) would be different. Same goes for millions of other Americans. Maybe it’s luck, maybe it’s that the only thing that matters these days are excellent people skills, I don’t know. What I do know is that it’s not as simple as you make it sound. Without exception, every truly successful person I know caught a break, whether it be an investor for their business plan or merely being able to beat out scores of other equally qualified applicants for a decent job.
We all have a lot of control over our own destiny, that control is not absolute, and not everybody has those uncontrollable elements work in their favor. If we did, then nobody would ever lose money in the stock market.